“Missing” Social Media Value

I have no doubt there is some value in social beyond what can be measured, as this has been the case for all marketing since it began ;) The problem is this value is often situational, not too mention not properly measured using an incremental basis (as you point out).

For example, to small local businesses who do no other form of advertising, there is a huge amount of relative value to using social media, versus no advertising at all. Some advertising is much better than none, and since it’s free, the incremental value created by (properly) using social is huge.

On the other hand, I wonder why social analysis seems to forget that people have to be aware of you to “Like” you in the first place. Further, it seems unlikely a person would “Like” a brand or product if they have not already experienced it, and are already a fan. If this is not true, if people “Like” a company even thought they do not (paid to Like?), then the problems with social go way beyond analysis…

But if true, , the number of “Likes” doesn’t have as much to do with awareness as it does with size of customer base, and is much more aligned with tracking customer issues (retention, loyalty) than anything to do with awareness / acquisition.

Add the fact many companies are running lots of advertising designed to create awareness, and the incremental value of social as a “media” may be close to zero, or at least less than the cost to analyze the true value of it.

And this last, really, is the core of the issue. It’s simply not possible to measure “all” the value created by any kind of marketing, and there are hugely diminishing returns as you try to capture the last bits. I think it’s quite possible the optimism for “value beyond what can be measured” is less than the cost of measuring it *if* people keep looking in the awareness / acquisition field.

Folks who want to find this “missing” social value should start doing customer analysis, and look in the “retention / loyalty” area, where the whole idea of social is a natural, rather than a forced, fit.

Has to be There

I find it really interesting that whenever there is a discussion of measuring the value of social media, there’s such a bias towards believing there is value in social beyond what can be properly measured. See the comments following this post by Avinash for a good example. Speculation is fine, but the confidence being expressed that a new tool or method will uncover a treasure trove of social media value seems un-scientific (as in scientific method) at best.

I don’t doubt there is some value in social media beyond what can be measured, as this has been the case for all marketing since marketing measurement began. These measurement problems are not new to social either: Marketing value created is often situational, it depends on the business model and environment. What works in one situation may not work in another.

For example:

To small local businesses who do no other form of advertising, there is a huge amount of relative value to using social media versus no advertising at all. Social advertising is much better than none, and since it’s free, the incremental value created by (properly) using social is huge. It’s also really easy to measure the impact and true value, since the baseline control is “no advertising”. Lift, or actual net marketing performance, can be pretty obvious in his case.

On the other hand, many companies are running lots of advertising designed to create awareness, and the incremental value of social as a “media” may be close to zero for these companies, or at least less than the cost to analyze the true value of it. Possible explanation: Social events such as “Likes” or comments are simply representations or affirmations of awareness already created by other media, so by themselves, create little value. In other words, events such as Likes might track the value of other media spending, but may not create much additional marketing value.

Why is this plausible? It seems unlikely a person would “Like” a brand or product if they have not already experienced it, and are already a fan. This means in the vast majority of cases, little incremental awareness / acquisition is created. If this case is not true, if people “Like” a company even though they have no reason to (paid to Like?), then the problems with social marketing analysis go way beyond tools – the concept and data driving the analysis itself is flawed.

But if Like really means Like, the number of Likes or any other similar social events do not have as much to do with awareness as they do with the size of a loyal customer base, and are much more aligned with tracking the success of other awareness / acquisition campaigns.

Looking for Love in All the Wrong Places?

That all said, I believe there is some value being created in the acquisition / awareness area from social. The problem seems to be this value, when measured, is quite a bit less than everyone expects. So “the hunt for social value” seems never ending, with speculation and measurements contrived from thin air immensely popular. This missing value just has to be there, right?

The core problem is an old one: online value measurement definitions are all over the map, so it’s easy to claim value was created by simply inventing a new way to measure success. I can’t wait for the day when established test and measurement standards (like using control groups) are adopted in the online space.

If you’re unfamiliar with using control groups, the simple explanation is this: just because someone was exposed to a message does not mean it changed their intended behavior, as in visiting your site. If you want to measure cause and not just correlation, finding the lift or incremental value created by exposure, use control groups – just like in drug testing. (11/2014: Google just published a Think piece on this, see #4 in download here).

Meanwhile, I think it’s quite possible if people keep looking in the awareness / acquisition area, the value of social “beyond what can now be measured”, in many cases, is probably less than the cost of actually measuring it.

Alternatively, folks who honestly (read: using the scientific method) want to find this “missing” social value should start doing customer analysis, and look in the retention / loyalty area, where the whole idea of social is a natural, rather than a forced, fit. Customers being people (as opposed to events) who generate recurring value.

Why this approach? Based on my experience, People are Social, Media are not. So if you want to derive social value, you use people metrics, not media metrics.

Using this approach, I have unbridled optimism for the value of social.

But I won’t go as far as insisting value is there without measuring it properly first. Because that’s not how science works.

See ya at eMetrics NYC!

P.S. There’s lots of real experimental science out there on the effects of social media in the marketing space, have you reviewed it?

You will find this material to be a treasure trove of new ideas and proper methods worth pursuing in the social measurement space, example here on measuring “influence”. Get yourself a subscription to the journal Marketing Science or similar. If you are a DAA member, you can request a copy of this fully documented, peer-reviewed scientific experiment on measuring influence at bottom of page.

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8 thoughts on ““Missing” Social Media Value”

Yes, “Likes” are affirmations of awareness, therefore they are an indicator of the performance of the other marketing actions.
But Facebook friends may discover on their wall the existence of a company thanks to “Likes”. So “Likes” may lead to increase awareness.

Don’t you think “Number of likes” can be used as a leading indicator of awareness?

Sure, I think Likes can be a leading indicator of awareness, that was my theory. So tracking Likes is a fine and dutiful sport. Do Likes create value is another question. Many analysts believe there is a lot of value created beyond what they have measured. I’m just asking for a scientific inquiry before jumping to conclusions – that’s what analysts should do.

I grant you there may be “Wall Discovery” and this would indeed create new awareness. But what is the magnitude of this factor, relative to the number of Likes? A little value or a lot? Enough value to justify the cost of managing a Facebook program? These are the kinds of questions analysts should be asking, right?

For example, it is well known / proven in social science that friends know a lot about what their friends like, because they talk about stuff they like.

So, here’s a question: if a person Likes a company that appears on their Wall, is this new awareness? Or is it simply *acknowledging* awareness, which falls into your Category of “Leading Indicator”?

If the Like does not represent new awareness, was value created, at least in the area of social as “media”? These are the kinds of questions that need to be answered.

I’m not saying there’s no value created, but that analysts really should be careful about claiming value because they *think* there is value.

Interesting thoughts with which I don’t agree! It doesn’t matter how science works. I recalled the situation with “cold fusion”. Science couldn’t explain it, and that is why we’re losing the opportunity of using cheap energy. Science cannot explain the impact of social media (it’s people who are there, and you can hardly predict what they are gong to do). Some will click on the links, others won’t. It depends on people. And when you’re not using it, you might be losing a great number of potentional clients.
Tim

If what you are saying is social media does not create enough new awareness to justify the expense of measuring it for that purpose, I believe we are in agreement.

If by saying “It doesn’t matter how science works” you mean the creation of value or effect can be proven without the need for understanding the specific underlying mechanisms, I agree. Science is full of proofs of the existence of an effect where the precise mechanism causing the effect is in dispute. Still, the players can all prove the effect exists.

Or are you saying: it’s much easier to hype something because it fits an agenda than prove the value of it using a controlled test? Again, we would agree.

Oh, no, Jim I’m pretty sure Tim is in violent disagreement with guys like you and I :)

Tim’s argument is based/founded in advertising constructs. That is: We don’t need to understand, we need to simply trust (that something works) and be motivated by fear of “missing out” on something great. It’s how the ad industry has trained CMOs to behave for years. And they’re reaping the results: 30% approval ratings and falling.

To say that science cannot explain the impact of social media is false. And to suggest that what we’re after here is “better prediction” is to get at the heart of the matter:

What are we after with social– a better way to serve an ad or a means to achieve a sale? Most CMOs will choose the better ad. Bold CMOs will choose the sale. When you strip away this constant navel-gazing of “what is ROI?” and measurement– and define it as “a sale” it gets scarey simple.

I just wrote a book (www.oth.me/buyOTHM) on how the science of direct response and neurolinguistics is allowing small and large businesses to make PROVE-ABLE sales via social.
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Social events such as “Likes” or comments are simply representations or affirmations of awareness already created by other media, so by themselves, create little value. In other words, events such as Likes might track the value of other media spending, but may not create much additional marketing value.
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Are you kidding me, Jim? This is so fantastically lucid. I need to quote you here there and everywhere on this one!!

Similarly, I’m really asking, what is the specific hypothesis behind social measurement? Because without a hypothesis you can “prove” anything ;)

If the hypothesis is “new awareness”, then Lucy has some ‘splaining to do, because to honestly affirm a “Like” that person has to be aware already. Not sure folks can get away from that logic; to argue otherwise brings up the uncomfortable idea of “don’t really Like” Likes of all kinds.

This would create a situation similar to “we’ll pay you to view ads”, one of the stupidest biz models ever, where the value prop was proven false.

For example, what if a Like really does not mean the person Likes the entity, but the person is brainlessly auto-Liking for some social reason? What % of Likes do not represent a person actually Liking the entity? What does this idea do to all those “spread the word” models that are out there , e.g. is a person really an “influencer” if they are also an auto-Liker?

Then, as Benoit pointed out, you have a 3rd scenario, a pure awareness play that might not even involve a Like, but could. Person Likes an entity their BFF was totally unaware of, and this BFF does not auto-Like it, but explores it first, then potentially Likes it later on.

This specific scenario, seems to me, is the one folks should be exploring if the hypothesis is “social creates new awareness”. The value of this scenario is mitigated by the potential for BFF’s to already know each other’s favorite companies / products / concepts at a deep level – the Like may be new but the awareness is not.

Which leaves a subset where truly new awareness is created – new company / product launch. Person discovers a brand new idea and Likes it; BFF sees the Like and it’s indeed new awareness because the concept did not previously exist – if BFF has not seen new launch TV spot, online display ad, etc.

Great, it works! What % of the overall activity is this scenario, and what is the incremental value of it? Is this value anything close to what so many analysts are projecting it is?

Folks interested in further investigation into these ideas, tons of real research out there – search on:

weak ties – strong ties

Again, I’m not saying “social media doesn’t create value”. I’m saying if social does create incremental value, the majority of this value is not likely in the “new awareness” area, seems to me.

Great piece and some interesting comments. I totally agree with your main thrust when you write:

“Alternatively, folks who honestly (read: using the scientific method) want to find this “missing” social value should start doing customer analysis, and look in the retention / loyalty area, where the whole idea of social is a natural, rather than a forced, fit. Customers being people (as opposed to events) who generate recurring value.”

On the awareness/acquisition side I also agree with the main argument that on most cases there is likely to be little value or less value than is being currently apportioned and it is most often a personal confirmation of one’s interests and tastes.

However for some product/brand launches I suspect (although I can’t scientifically prove it :-) as I don’t have access to any data) there is strong value in social media generating awareness. I am thinking of examples such as the launches of Dropbox and Spotify. As you rightly say it depends on the business model and environment.

A second point that I would like to challenge on is the concept that if a BFF sees a TV ad (or other advertising channel) before seeing a Like, that that Like has had no impact on generating awareness. Imagine the scenario where I am the BFF and I am sat happily in the sitting room with the TV in the background and an ad runs for Product X and I pick up some of the information about Product X but not everything. I then use some form of social media and notice a friend has liked Product X whether that is a facebook page, blog article etc. I then go and read that content and get further information and clarity on what Product X is and my awareness of the product has increased. I would argue in this case the like button + associated social content has played a significant role in generating awareness of Product X. What I am trying to highlight in a very much roundabout way is that a strong awareness of a product/service is often not generated through just one channel but across many. I would admit that this scenario is more likely when Product X is fairly new to the market place.

However going back to your last comment I would strongly agree that in most cases the value is on the whole overestimated by marketers and analysts and the focus of finding value should be found in loyalty and retention.